A robust 51% growth seen in CNG sales

The city gas distributors experienced substantial growth in their Compressed Natural Gas (CNG) sales, reaching 19.4 million metric standard cubic meters per day (mmscmd) in the six months leading to March 2023.

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In the recent span of two years, city gas companies have witnessed a swifter growth in their highly profitable Compressed Natural Gas (CNG) sales volume, outpacing the comparatively less profitable residential gas supply segment.

Oil ministry data reveals that city gas distributors experienced substantial growth in their Compressed Natural Gas (CNG) sales, reaching 19.4 million metric standard cubic meters per day (mmscmd) in the six months leading to March 2023. This reflects a remarkable 51% increase compared to the period between October 2020 and March 2021. Additionally, sales of Piped Natural Gas (PNG) intended for residential cooking saw an 11% rise, reaching 2.9 mmscmd during the same timeframe.

Sales to commercial entities including hotels and malls decreased by 25% to 0.7 mmscmd, while industrial sales dropped 38% to 10.3 mmscmd due to costly imported gas, leading to a switch to alternative fuels.

Within a span of two years, the proportion of CNG sales in the aggregate sales of city gas distributors surged significantly from 39% in the six months leading to March 2021 to 58%. In contrast, the portion of sales directed towards industrial clients decreased from 50% to 30%. While the fraction of sales catering to domestic households using PNG experienced a slight uptick to 8.7% from 8%.

City gas firms receive regulated domestic gas, which they vend as CNG and domestic PNG at market rates. With regional monopolies, they wield pricing clout and enjoy robust margins. CNG and domestic PNG prices are swayed by alternative fuel costs like petrol and LPG. Taxation heavily affects petrol pricing, while CNG and domestic PNG face lighter levies.